Exports surge, imports
dogged by China factor
NEW DELHI, Dec 27 — India recorded a morale boosting surge in exports
while rise in the oil bill and dumping from China predominantly
influenced the import scenario in the year marking the turn of the
century.

Insurance sector on the
fast track nowNEW DELHI, Dec 27 —
Though a doubtful starter, the insurance industry was ultimately opened
up this year for private players like Reliance, Tata and Bajaj, to
provide consumers more choice while generating the much-needed long term
funds for moving over to a higher growth path.

Maruti
goes ahead despite odds
NEW DELHI, Dec 27 — Despite a general slow down in demand in the
automobile sector, a prolonged labour strike and uncertainties over
disinvestment, Maruti Udyog Ltd presented a spirited fight this year by
making history in sales, offering a slew of new models and retaining
market leadership.

VRS for SBI okayed
MUMBAI, Dec 27 — The Central Board of Directors of the State Bank of
India today accorded approval for adopting and implementing the
Voluntary Retirement Scheme for the employees, beginning from January
15.

Panel on ‘khadi’
finalises package
NEW DELHI, Dec 27 — The high power committee headed by Deputy
Chairman, Planning Commission K.C. Pant has finalised a comprehensive
package of around Rs 1,400 crore to strengthen the khadi and village
industries sector.

Withdraw dividend tax
hike
new delhi, dec 27 — The Associated Chambers of Commerce and
Industry of India (Assocham) has urged the Finance Ministry to
withdraw in the coming Budget the tax hike on dividend distribution in
view of its “serious impact” on the growth of corporate and mutual
fund sectors, viability of independent power projects and
attractiveness of india as an investment destination.

Normal
working at SBICHANDIGARH, Dec 27 — Mr
D.S. Bengali, Deputy General Manager (Ludhiana Module) of State Bank
of India informed that like yesterday today also the strike call given
by the State Bank of India Staff Association (Chandigarh Circle) had
little effect on the working of the branches functioning under the
jurisdiction of Zonal Office, Ludhiana.

Bank of Punjab opens
ATM at KatraJAMMU, Dec 27 — Bank of
Punjab, today opened its first ATM in Katra. Mr S.S. Slathia, Minister
for Power, Tourism and Sports activated the ATM in the presence of Mr
Tejbir Singh, Executive Director of the bank.

Review
cess on STLUDHIANA, Dec 27 — The
Department of Legal and Legislative Affairs, Punjab and the Sales Tax
department seem to determined to create hassles before the industrial
units of Punjab which are already passing through recession.

Corporate
news

Bulls
resort to heavy buying
REFLECTING the firm trend in
key heavyweights, the BSE sensitive index showed a net gain of 50.73
points or 1.33 per cent at the Bombay Stock Exchange.Though
the top heavyweight Infosys Tech was moderately down in line with weak
trend in its ADRs on the Nasdaq yesterday, others like HLL, BHEL, Grasim,
L&T, MTNL, RIL, NIIT, Satyam Computer and Zee Tele aided the sensex
upsurge.

Offbeat

Ancient Russian city
raises toast to IndiaLIPETSK (Russia): The
sleepy, ancient Russian city of Lipetsk raised a toast to Indian culture
and art with a series of events to mark its association with that
country.

NSE
forecast

Elder Pharma a price
scripTHERE
has been a sharp erosion of investor sentiment in the market again as
the tumbledown at tech counters continues unabated. While fears of a
slowdown in growth rates of top tech companies is cited as the prime
reason for the sharp decline in prices at these counters, there is also
considerable fear that the worst is yet to come.

NEW DELHI, Dec 27 (UNI) — India recorded a morale boosting surge in exports while rise in the oil bill and dumping from China predominantly influenced the import scenario in the year marking the turn of the century.

The April-October trends indicate an export growth of 20.51 per cent in 2000-2001 against the target of 18 per cent perceived to be rather ambitious at the
beginning of the year.

Exporters raked in foreign exchange equivalent of $ 25 billion in April-October over $ 20 billion in the similar period of last year.

On the other hand, plantations, agri and allied products, sports goods, project goods and handicrafts were counted among laggards.

While the government claimed its fair share of the credit for an impressive show by exporters, analysts attribute the growth also to an upsurge in the South East Asian economies besides continuance of the robust performance in the US economy (unconfirmed signs of slowdown in the US economy are quite recent).

The Ministry of Commerce and Industry, under Mr Murasoli Maran took initiatives to beef up exports. Some of the well-publicised steps were conversion of Kandla, Santa Cruz, Cochin and Surat Export Processing Zones
(EPZS) to Special Economic Zones (SEZS).

Besides, the roadmap for new SEZs at Positra in Gujarat, Nangunery in Tamil Nadu, Kakinada and Visakhapatnam in Andhra Pradesh, Paradip in Orissa, Kulpi in West Bengal and Bhadohi in Uttar Pradesh was drawn.

Certain logistic support like computerising the functioning of the Directorate of Foreign Trade and Electronic Data Interchange, was made available to the export firms seeking a lot more push from the government to make a mark in the global market.

Minister of State for Commerce Omar Abdullah kept hunting for new markets in Latin America along with delegations from business chambers like the CII and the Federation of Indian Chambers of Commerce and Industry. “Strategy such as ‘Focus: LAC’ resulted in over 40 per cent growth in India’s exports to the Latin American region”, a Commerce Ministry spokesperson said.

In an economy marked by slowdown in industrial growth, analysts were not as much concerned with a 14 per cent growth in imports during April-October as with the dumping of goods from China and a runaway increase in the country’s oil bill.

With the producers jacking up the crude prices to as much as $ 34 per barrel earlier this year, india had to cough up $ 9.73 billion in the first seven months of the year, against $ 5.27 billion in the comparable period last year, a whopping increase of 84.51 per cent.

Export growth would, of course, depend on the signals from the world economy besides the domestic push-up factor.

NEW DELHI, Dec 27 — Though a doubtful starter, the insurance industry was ultimately opened up this year for private players like Reliance, Tata and Bajaj, to provide consumers more choice while generating the much-needed long term funds for moving over to a higher growth path.

To catalyse the process, government notified the Insurance Regulatory and Development Authority (IRDA) Act allowing 26 per cent foreign holding in an Indian venture and also allowed foreign direct investment (FDI) in the sector through the automatic route.

But leaving apart the few manufacturing monoliths, most of the new entrants —
ICICI, HDFC, Sundaram Finance, Kotak Mahindra Financial and lately Vysya Bank — are from the financial sector itself.

Insurance Regulatory and Development Authority (IRDA) Chairman N. Rangachary could not suppress his disappointment in a forum and said “We expected greater participation from industry as they are in a better position to understand the needs and frame products best suited for Indians.”

The recession ridden industry, however, needed more time to test waters before plunging into a nascent sector knowing full well that Life Insurance Corporation (LIC) and General Insurance Corporation’s (GIC) four subsidiaries would leave little space in the one-billion large Indian insurance market.

In contrast, foreign players were cautious though they appeared eager to enter India even as minority shareholder.

Foreign insurer adopted a “wait and watch” policy for over two years and were ever more cautious to choose their Indian partners as insurance itself was a risky business and forging partnership in India was all the more risky proposition for them.

US-based Allstate Financial, for instance, backed out of its venture with Dabur even after applying for licence on the first day on the excuse of incurring huge losses in Korean Chaebol Daewoo’s bankruptcy.

Others like Metlife and CGU were jittery in finalising their partners as they were not sure whether the Indian companies were as serious as they themselves even with only a 26 per cent stake.

Why blame foreign companies? Our own state-owned banks were all the more confused after Reserve Bank of India decided to grant permission selectively for banks to hold more than 50 per cent stake in their proposed venture.

Some banks initially drew up strategies to tie-up with other like-minded banks but could not decide who would hold the
scepter.

So the proposed tie-up between Punjab National Bank (PNB), Bank of Baroda (BoB), Allahabad Bank and Vijaya Bank died a premature death with PNB choosing to be a “strategic investor” with 15 per cent stake in a venture with hero group and Zurich Financial Services.

Even private sector Vysya Bank preferred the Damani Group and ING, while Jammu & Kashmir Bank was happy with a 25 per cent stake with a real estate company and a leading US-based insurance company with 26 per cent stake in their life insurance venture rather than tying up with an Indian Bank.

Convergence of the companies from various sectors with different outlook into the insurance sector
was not without a purpose.

For Reliance and Tatas, it was yet another green pasture that provided huge opportunities as they themselves had a huge captive business worth hundreds of crore, while for the financial power houses like
ICICI and HDFC, it was another product in their portfolio and a step forward towards their ultimate aim of becoming an ‘universal bank’.

The new companies have the glamour shields of their existing brand names that they would like to put forward while fighting the emerging competition but the old warriors like LIC are no less aggressive.

Insurance Regulatory Authority
(IRDA) framed all the necessary norms within a span of 3-4 months. “Private players will have a level playing field with existing companies,” Rangachary asserted.

IRDA wasted no time to grant licences to six companies before Divali and even approved some of their new products by December end.

The regulator also allowed companies to invest about 25 per cent of their funds in equities and debentures.

But at the same time, the
IRDA chief made it clear that the companies would have to abide by strict financial norms including an absolute solvency margin of 150 per cent.

This was to prevent companies going bust in the initial years and thereby shattering consumers’ faith in private companies and the regulator.

IRDA would also go through the books of the companies frequently, if required every fortnight, to eliminate any risk element.

IRDA also granted licences to over 26 companies including
NIS Sparta, rnis, Knowledge Network India for setting up insurance training institutes to ensure that only trained professionals carry out the marketing.

Come January 2001, Indian consumers will witness new advertisements and new initiatives by both old and new players to market their products.
— PTI

NEW DELHI, Dec 27 (UNI) — Despite a general slow down in demand in the automobile sector, a prolonged labour strike and uncertainties over disinvestment, Maruti Udyog Ltd (MUL) presented a spirited fight this year by making history in sales, offering a slew of new models and retaining market leadership.

MUL registered an all time high in sales in the fiscal 1999-2000 by selling over 4,06,290 vehicles. After this boom, the domestic car market turned sluggish. But the general drop in sales in the industry did not dampen the spirits of Maruti which could sell more than 3.24 lakh vehicles during this calendar year and keep a 64 per cent market share in November.

The labour strike in Maruti entered court premises, reflected in Parliament and resulted in demonstrations outside Udyog Bhavan, headquarters of Heavy Industries and Public Enterprises Ministry. But the production remained normal and the average daily production in November was more than that of the first seven months of the current fiscal.

The proposal for disinvestment met with rough weather inside Parliament and on the negotiating table with Suzuki, the 50 per cent partner in the joint venture. A Committee of Secretaries studied the proposal but there was not much headway as Heavy Industries Minister Manohar Joshi himself was reluctant for a speedy disinvestment.

MUMBAI, Dec 27 (UNI) — The
Central Board of Directors of the State Bank of India today accorded approval for adopting and implementing the Voluntary Retirement Scheme
(VRS) for the employees, beginning from January 15. In its meeting here today, the board also provided an option to the management to either close early or extend the
VRS, depending on the requirement of the manpower and also with the objective to optimise the bank’s human resources. The scheme will be open from January 15 to 31, 2001 and the applications will be accepted during this period only.

The bank is making efforts to redeploy and retain staff along with major technological upgradation.

NEW DELHI, Dec 27 (PTI) — The high power committee headed by Deputy Chairman, Planning Commission K.C. Pant has finalised a comprehensive package of around Rs 1,400 crore to strengthen the khadi and village industries sector.

According to official sources, final recommendations of the committee will be presented by the Ministry of Small Scale Industries to the Prime Minister Atal Behari Vajpayee, after his return from Kerala where he is currently on vacation.

The recommendations include a budgetary support of around Rs 400-500 crore and an institutional support of around Rs 800 to Rs 900 crore to the Khadi and Village Industries over a period of five years from 2001-05.

The committee has recommended that artisans should be allowed to choose between rebate and Market Development Assistance for some time. However, the terms and conditions of the MDA have been made more attractive in order to ensure that it replaces the rebate system in the long run.

Rebate was introduced by the government to compensate high cost of khadi production and to motivate sales, however the system has failed to give the desired impetus to the sector.

In fact, a high powered committee constituted under the chairmanship of the then Prime Minister P.V. Narasimha Rao had suggested replacement of rebate on khadi by the MDA. But, due to opposition from the khadi institutions the MDA was withdrawn.

In 1999-2000, around Rs 140 crore was given towards rebate while in the current fiscal uptil August 2000 around Rs 21 crore worth of rebate claims had been made.

The high power committee has also recommended that term loans of around Rs 300 crore in the khadi sector should be converted into working capital.

In the past, a line of credit of around Rs 1000 crore had been extended to the Khadi and Village Industries Commission (KVIC) for onward lending to the khadi institutions as term loans but these were being treated by the institutions as working capital.

Another suggestion made by the committee pertains to payment of minimum wages and an insurance scheme for the khadi workers.

Sources said under the insurance scheme one-third of the premium will be paid by the KVIC, one-third by the khadi institutions and one-third by the artisans.

Other recommendations include an initial seed capital to be given for product design and packaging facility.

The committee has also said that a fresh census of all the units should be done on a priority basis by KVIC.

The government had set up the high powered
committee in October this year to suggest measures for strengthening the khadi and village industries sector.

CHANDIGARH, Dec 27 — Mr Amitabha Guha, Chief General Manager of the State Bank of Patiala today inaugurated the 720th fully computerised and specialised personal banking branch at Ludhiana. Mr Guha also launched the bank’s depository participation partnership of NSDL with Stock Holding Corporation of India at Ludhiana Centre. Under this scheme, the bank has installed a computerised Request Transmission Machine (RTM) at Bharat Nagar Chowk branch on which investors can buy/sell/maintain their demat securities portfolio themselves. Their orders are relayed to the SHCIL counter by the computer and the required transaction carried out and confirmed to the customer within a very short period.

Mr Amitabha Guha visited Vikalang Sahayata Kendra and participated in sponsoring by the bank of some rehabilitation aids to needy
persons.

Mr S.P. Mittal, DGM of the bank’s Jalandhar zone said that the bank’s business in Ludhiana district is over Rs 1,000 crore. Bank already has four specialised branches in Ludhiana city for International Banking, SSI, Hosiery and Hi-Tech Agri.

new delhi, dec 27
(uni) —The Associated Chambers of Commerce and Industry of India (Assocham) has urged the Finance Ministry to withdraw in the coming Budget the tax hike on dividend distribution in view of its “serious impact” on the growth of corporate and mutual fund sectors, viability of independent power projects and attractiveness of india as an investment destination.

In a press release today, Assocham said doubling of the tax on distribution of dividend from 10 per cent to 20 per cent and the surcharge had resulted in the effective tax rate of 49.6 per cent on domestic companies.

The surcharge was even more than the tax payable by foreign companies operating in india through their permanent establishments.

“This will have negative impact on the growth of corporate and mutual fund sectors and also make india a less attractive destination for foreign investors due to high tax incidence.”

Where the companies were operating through subsidiaries, the tax incidence was even higher as the dividend declared by a subsidiary was also subject to distribution tax which was not given set-off credit when the holding company distributed its dividend out of this subsidiary’s dividend receipts, unlike in the past under Section 80M.

CHANDIGARH, Dec 27 — Mr D.S. Bengali, Deputy General Manager (Ludhiana Module) of State Bank of India informed that like yesterday today also the strike call given by the State Bank of India Staff Association (Chandigarh Circle) had little effect on the working of the branches functioning under the jurisdiction of Zonal Office, Ludhiana.

All the 134 branches of the Module have rendered normal banking services during the strike period. The presence of clerical/subordinate staff has further improved today at branches. Clearing houses in all districts/centres functioned normally.

Shares in the new group will start trading on the London Stock Exchange with dealings in American depositary receipts in New York.

Shareholders in Glaxo
Welcome receive one share in the merged company for every Glaxo share, while shareholders in SmithKline get 0.4552 shares per SmithKline share.

Jean-Pierre Garnier, the Smithkline head who takes over as Chief Executive of the enlarged company, said in a statement the new group was a market leader in four of the five largest therapeutic categories in the industry.

“GlaxoSmithKline is well placed to respond to the healthcare challenges of the 21st century,’’ he said.

The company, with a market capitalisation of £ 114 billion ($168.7 billion) based on last week’s close, has a lot to prove after a long and painful birth.

A series of drug setbacks at both companies recently has raised investor concerns that the new group will struggle to match the growth rates of the best of its rivals.

Shares in both companies have underperformed the
European drugs sector by 12 per cent this year, reflecting worries about the quality of the drugs pipeline and the new company’s growth prospects.

JAMMU, Dec 27 — Bank of Punjab, today opened its first ATM in Katra. Mr S.S. Slathia, Minister for Power, Tourism and Sports activated the ATM in the presence of Mr Tejbir Singh, Executive Director of the bank.

The ATM at Katra will be a boon to the lakhs of devotees who visit the shrine every year, as they will not have to bother about carrying cash while travelling and use their BOP ATM card to withdraw cash at Katra.

Mr Tejbir Singh said it is a part of our endeavour to provide all the convenience to our customers even in holy places where none existed before.

The ATM is linked online with all branches of the Bank of Punjab and ATMs across India as well as the Master Card circus ATMs network worldwide. NRIs coming from across the globe would also be able to withdraw cash through the ATM at Katra, as it is linked to all multinational banks through the Bank of Punjab’s state-of-the-art technology infrastructure.

LUDHIANA, Dec 27 — The Department of Legal and Legislative Affairs, Punjab and the Sales Tax department seem to determined to create hassles before the industrial units of Punjab which are already passing through recession.

The Department of Legal and Legislative Affairs has notified for the collection of 10 per cent social security fund on sales tax which has become a matter a source of great harassment for the units which have been exempted the payment of sales tax under the Punjab Sales Tax Act and within the purview of industrial policy.

Mr D.S. Chawla, President, United Cycle and Parts Manufacturers Association, has written to the CM, the Finance Minister, Speaker of Punjab Vidhan Sabha and Commissioner Excise and Taxation Department to review the imposition of this cess on sales tax on those units which have been exempted the payment of sales tax under different provisions.

Mr Jaswant Singh Birdi, General Secretary of the association, said, “The concept of development tax for the welfare of senior citizens, widows, destitutes and disabled persons was a good one. However, the government should also understand the problem of exempted units who sell the goods to registered dealers and get a declaration of the non-payment of sales tax. How can they be asked to pay the cess on sales tax when they had not paid the sales tax itself.”

Mr Chawla said the Sales Tax Department had started issuing notices to the exempted units to deposit the said tax in favour of Secretary Social Security, Women and Child Development Department. Otherwise they will have to pay the penalty.

Corporate
news

Bulls resort to heavy buying

REFLECTING the firm trend in key heavyweights, the BSE sensitive index showed a net gain of 50.73 points or 1.33 per cent at the Bombay Stock Exchange.

Though the top heavyweight Infosys Tech was moderately down in line with weak trend in its ADRs on the Nasdaq yesterday, others like HLL, BHEL, Grasim, L&T, MTNL, RIL, NIIT, Satyam Computer and Zee Tele aided the sensex upsurge.

Foreign Institutional Investors (FIIs) which reportedly were sellers to the tune of Rs 670 crore during the last settlement period, were almost conspicuous by their absence in view of approaching yearend.

The rally was mainly led by Himachal Futuristic Communication, Software solutions, Wipro, Global Tele, NIIT, Hughes Telecom, Digital Equipment and was well supported by PSU giants like VSNL, and MTNL.

The board of
FloatGlass India Ltd (FIL) is to consider the issue of offering equity shares on rights basis and hike in the authorised share capital of the company at its meeting in January.

In a notice to the BSE today, FIL said the board would meet on January 5, 2001 to consider both the issues.

State Bank of India Mutual Fund (SBIMF) has collected about Rs 300 crore under its Magnum Gilt fund during the initial offer period, which closed on December 22, 2000.

Magnum
Gilt, an open-ended scheme, would invest funds only in government securities with zero credit risk. SBIMF said in a release here today.

The scheme would reopen for continuous sale and repurchase from January 1, 2001 at net asset value (NAV) related prices, it added.

NIIT today announced plans to set up 1000 Infotech training centres in India and overseas by end of 2001. We are planning to set up 1000 more centres in 2001 from our current strength of 2000 centres which will be mostly in remote parts of the country and in the overseas market,” Chairman NIIT. Raiendra Pawar, told reporters here after launching the institute’s 2000th centre in Allahabad.

Essar group will not start work on its Rs 8,000 crore refinery project till February next year despite achieving the financial closure almost two months ago.

The complete the financial closure almost Essar Oil Company has roped in ABB Lummus to take part equity on a temporary basis, company sources said but pointed out that disbursal of loans from financial institutions was awaited.

Ramco Systems has entered into a tie-up with the US-based Edeagroup to promote its latest collaborative commerce product, “Ramco Value Net”. Both the firms will be combining their back office and front-end solutions in a partnership to offer end-to-end collaborative commerce (e-commerce) services that replace static web-enabled value chains, according to a Ramco press release.

LIPETSK (Russia):
The sleepy, ancient Russian city of Lipetsk raised a toast to Indian culture and art with a series of events to mark its association with that country.

Lipetsk, the capital of the central Russian province of the same name, organised an Indian film festival, photo exhibition, Indian dance and music programmer that attracted thousands of people from the city.

Lipetsk has been closely associated with India’s industrialisation right from the mid-1950s, when Prime Minister Jawaharlal Nehru visited the country.

Indian Ambassador to Russia S.K. Lamba inaugurated the Indian film festival. Mr Lamba was in the region at the head of an Indian delegation. The legendary Indian film producer and actor Raj Kapoor’s film “Mera Naam Joker” that had Russian artists acting in it and Satyajit Ray’s “Shatranj ke Khiladi” were two films highly appreciated by viewers. Indian films “Sharmili” and “Kabhi Haan Kabhi Na” were among others screened at the festival.

The exhibition on history and proceedings of the Indian Parliament, first inaugurated in the Russian State Duma or the lower house of the Russian Parliament, was thrown open to the people to give them an idea of India’s vibrant parliamentary democracy.

“Russia — by its size and India — by its population and rich experience in parliamentary democracy can be of tremendous use for Russia,” said Lyudmila Kurukova, the deputy governor of the region, who inaugurated the function.

The artists of Jawaharlal Nehru Cultural Center (JNCC) at Moscow presented their programme at a number of venues in the city. Classical Indian dance routines like the “Kathak” and “Kuchupudi” kept an audience of about 800 people spellbound at the Lipetsk theatre.

The Russians were thrilled by the duet performance by JNCC artists. This is the first time in many years that Indian artists have performed in the city.

People recalled with nostalgia 1987, the year when India had a yearlong cultural festival in which thousands of Indian artists performed in hundreds of Russian cities through the length and breadth of the vast country.

The local media provided wide coverage to all events in the province.
— IANS

NSE
forecast

Elder Pharma a price scripBY Ashok Kumar

THERE has been a sharp erosion of investor sentiment in the market again as the tumbledown at tech counters continues unabated. While fears of a slowdown in growth rates of top tech companies is cited as the prime reason for the sharp decline in prices at these counters, there is also considerable fear that the worst is yet to come.

Notwithstanding these dark clouds that have gathered around the Indian bourses, its propensity to bounce back when all seems lost cannot be discounted. Traders could use the downslide at the bourses to cash in on emerging opportunities and those with a bearish sentiment could consider taking up positions at the counters of ITC at Rs 898 (cover up at Rs 867) and MTNL at Rs 169 (cover up at Rs 151).

Long positions could be considered at the counters of Hindustan Lever at Rs 194 (square up at Rs 206) and Visualsoft at Rs 721 (cover up at Rs 803). The dark horse bet of the week is Elder Pharma whose hidden brand equity could yield it fair returns in the future. The optimal course of action this week would be to start making selective purchases.

AwardsCHANDIGARH, Dec 27 (TNS) — Three best primary agricultural and credit societies chosen out of nearly 92,000 of them in the country could be given awards tomorrow at Haryana Nivas here by Haryana Cooperation Minister, Mr Kartar Singh Bhadana.

Vivaha
CHANDIGARH, Dec 27 (TNS) — Actress Raveena Tandon announced the new avataar of Vivaha — the much acclaimed biannual bridal magazine, as a quarterly from January, 2001. Vivaha was launched in January, 2000 to cover wedding fashions, honeymoon travel,
counselling through a vast range of columns and articles.